As astronomers vent their "deep pessimism and anger" at the way the Science and Technology Facilities Council (STFC), the UK's key public funding body for physics, has handled an £80m hole in its budget, a confidential report revealed by Education Guardian today only confirms their loss of confidence.

They fear the potential closure of university physics departments, uncertainty over the future of research facilities, including the Gemini giant telescope, and an exodus of the UK's top physics talent.

The council ran into financial difficulty after last year's spending review. Now, a confidential external assessment of the STFC's management, seen by Education Guardian, says there is weak leadership and a lack of clarity and direction at the body, which distributes £678m a year of public funds for physics and large research facilities.

The assessment by Investors in People, a government-owned company that sets national standards for people management and development, says reforms at the STFC are needed to ensure "a more robust and transparent management process".

Pessimism and anger

The Royal Astronomical Society, the UK's leading professional body for astronomy, blames the council for the funding crisis, which it says has "filled the community with deep pessimism and anger".

The assessment finds the merger of the two science funding bodies that created the STFC in April 2007, has so far been a failure. It says the STFC "lacks a clear identity" and warns that it must clarify its goals "without delay". It recommends the STFC seek external management "support".

It also exposes a lack of faith among senior staff in the ability of the STFC's leadership to steer the body forward. "Confidence in senior managers and across senior managers needs to improve."

The assessment adds weight to the concerns of leading UK scientists that weak leadership of the STFC is partly to blame for its funding crisis. Scientists claim Professor Keith Mason, chief executive of the STFC, made a poor case to the government for funding in last year's spending review.

The council has cut grants to universities by 25%, has delayed the construction of major physics facilities, and is planning to sell UK scientists' access to the Gemini telescopes in Hawaii and Chile. Physicists are bracing themselves for further cuts to research programmes this week.

Better management at the STFC and consultation with its community of scientists could have avoided the hundreds of job losses now likely as a result of the budget cuts, which could force some university physics departments to close, the scientists say. The government has also been criticised for ignoring warnings of the STFC's crisis.

The assessment, carried out in December last year, found that the council does not meet the Investors in People standard. But the report recommends the STFC's recognition as an "investor in people" be retained while it works on upping its game.

The assessor reports: "When I was briefed on the merger, I positioned myself to look for what was new, different, better, etc because of the creation of this new organisation. In the main, I failed to find anything." The assessment warns that the STFC must develop "clarity, without delay" to stem a "talent leak" of the people it needs to help it move forward.

According to the assessment, the STFC needs to reform its planning and evaluation mechanisms to ensure "a more robust and transparent management process". A higher degree of collaborative working "is absolutely essential".

A strategy for improving the performance of the STFC "was not evidenced", and "people do not as yet understand what is required to effectively move forward," the assessment says. It recommends "additional support, possibly external". "This should be considered initially for leaders and managers as they will have to lead others, at the same time as having similar feelings to those who are seeking support."

The assessment includes anonymous interviews with STFC staff. One senior staff member said, "People see a vacuum at the top. There is a lack of direction. We are struggling."

Another said, "There is no organisationa l direction. We lack strategic leadership and corporate strategy."

"[This] shows incompetence. Accountability sits at executive level. Some should expect their P45s," said another.

Mason acknowledged last week that the STFC needs to improve its decision-making and consultation processes, when he told MPs on the commons innovation, universities and skills committee that the council plans to set up advisory boards to inform its science boards.

'Sketchy presentation'

Professor Ken Peach, director of the John Adams Institute for Accelerator Science at Oxford University and Royal Holloway, told Education Guardian that the STFC gave a "sketchy presentation" of its science portfolio to government, as part of its spending review bid. Peach's assessment is based on documents released to him under the Freedom of Information (FoI) Act.

The documents also revealed that the STFC asked for £87.4m for space science, its largest single bid out of a total of £151m requested for additional research over three years. Peach says he is "surprised at the disproportionate emphasis on space exploration and technology", which may have left other areas of the STFC's portfolio underfunded. He has submitted a further FoI request to find out whether the STFC's focus on space was guided by the Department of Innovation, Universities and Skills, given the government's renewed interested in space science.

"Better management and consultation with the community would have ameliorated the worst effects of this budget crisis," he says. "Some of the job losses, which will have a devastating effect on the careers of young researchers, could have been spared; the damage to the UK's international reputation could have been reduced and the negative impact upon schoolchildren considering physics for A-level and at university could have been avoided".

Paul Hartley, director of corporate services at the council says: "The STFC is a young organisation and we welcome the Investors in People report. It highlighted strengths as well as areas where we can improve our practices. We are already working to implement the recommendations."